What is Company Valuation & How to Calculate It? Methods Explained

Choose the Right Business Structure for Your Film Production Company

Your first decision is choosing the right legal entity. This impacts ownership, liability, taxation, funding, and compliance. Here’s how the most common options compare:

Private Limited Company

• Best choice for media companies aiming to scale, raise investment, or partner with OTT platforms.
• Offers limited liability protection, higher brand credibility, and Foreign Direct Investment (FDI) eligibility.
• Easier to bring in shareholders and attract funding from production partners or venture capital.

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LLP (Limited Liability Partnership)

• Suitable for small-to-mid scale production outfits.
• Combines the flexibility of a partnership with limited liability protection.
• Compliance is lower than that of a Private Limited Company but is still not as investor-friendly.

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Partnership Firm

• Easy to set up but offers unlimited liability, meaning partners’ personal assets may be at risk.
• Limited in terms of scalability and investor trust.

While an OPC (One Person Company) works well for solo ventures, it restricts ownership expansion and isn’t ideal for scaling or attracting investors. A Sole Proprietorship, though simple to set up, comes with unlimited personal liability and lacks credibility. So, both structures are generally not preferred for a growing film or media business aiming for scalability, credibility, and investor interest.

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Register the Production House as a Legal Entity

Once you choose your structure, follow these steps:

1. Obtain DSC for directors/partners.
2. Reserve your company name via the MCA portal.
3. Draft and file the MoA & AoA (for companies) or LLP Agreement.
4. File incorporation documents with the MCA.
5. Receive Certificate of Incorporation (COI), PAN, and TAN.

Register the Brand and Logo as a Trademark

Your production house’s name and logo are powerful brand assets that set you apart in a competitive entertainment industry. Protecting them early ensures that no one else can misuse your identity or ride on your hard-earned reputation.

Steps:

1. Trademark Search – Visit the IP India portal to check if a similar name or logo already exists.
2. Class Selection – Most media companies file under Class 41 (entertainment services) and Class 38 (broadcasting), but additional classes may apply based on your services.
3. File TM Application Online – Submit your application with the required documents and fees.
4. Examination & Objections – The Trademark Registry will review your application; be prepared to respond to any objections or clarifications.
5. Final Registration – Once approved, your trademark is valid for 10 years and can be renewed indefinitely, ensuring long-term brand protection.

Get Copyright Registration for Original Works

In the media business, your creative works- films, scripts, songs, storyboards, promotional videos- are valuable. Copyright registration legally secures these works, giving you the exclusive right to reproduce, distribute, adapt, and monetise them.
Steps: 

• Apply online at the Copyright Office website.
• Submit the required documents (work details, creator’s info, soft copies).
• Pay the applicable fee.
• Wait for scrutiny and the issuance of the certificate.

Join a Film Producers Association

Organisations like the Indian Motion Picture Producers' Association (IMPPA), Film Producers Association of India (FPAI), and Western India Film Producers Association (WIFPA) provide legal backing, industry recognition, and a platform for networking.

Benefits include:

• Access to legal advice and dispute resolution services
• Opportunities for co-productions and collaborations
• Industry events and workshops to stay updated on trends and regulations
• Collective bargaining power and advocacy on industry matters

To join, submit your company incorporation documents and proof of work (films, scripts, or projects). Complete the membership application process as per the association’s guidelines and pay the prescribed membership fees. 

Open a Current Account in Your Company’s Name

A current account is essential for managing your production house’s day-to-day financial transactions smoothly and professionally. Unlike a regular savings account, a current account offers higher transaction limits and facilities tailored for businesses, such as overdraft options and multiple signatories.

Documents Required:

• Certificate of Incorporation (COI)
• PAN card of the company
• Memorandum of Association (MoA) and Articles of Association (AoA)
• KYC documents of directors (identity and address proof)
• Proof of registered office address

Consider banks that offer robust digital banking platforms, ease of fund transfers, and competitive transaction charges. Also, check for value-added services like merchant accounts for receiving payments, foreign currency transactions, and working capital loans.

Get GST Registration and Import Export Code (IEC)

For production houses and media companies, GST registration is mandatory if your annual turnover exceeds the prescribed threshold (₹20 lakh or ₹40 lakh, depending on your state). GST compliance helps you claim input tax credits, maintain transparency, and avoid legal penalties.

If you work with international clients, monetise content on platforms like YouTube, or export your services globally (e.g., selling films or digital content overseas), obtaining an Import Export Code (IEC) is essential. IEC is issued by the Directorate General of Foreign Trade (DGFT) and acts as a license to conduct cross-border trade legally.

How to Apply:

• GST Registration can be done online via the GST portal by submitting PAN, business details, and bank information.
• IEC application is filed online on the DGFT portal, linked to your PAN, with processing typically completed within a few days.

Get Music, Scripts, and Third-Party IP Licenses

In the media and production industry, using music, scripts, or other creative content created by others requires proper licensing to avoid legal issues.

Common Types of Licenses:

• Sync License: Allows you to synchronise music with visual media like films or ads.
• Master License: Grants permission to use the original sound recording.
• Adaptation Rights: Needed if you plan to remake, translate, or modify existing works.

Key Licensing Bodies in India are IPRS (Indian Performing Right Society) & PPL (Phonographic Performance Limited).

Protect Digital Content and Manage Online Rights

In today’s digital age, safeguarding your media company’s content online is as important as creating it. With piracy and unauthorised sharing rampant, implementing strong digital protection measures helps you retain control and monetise your work effectively.

Here are a few ways you can protect and manage your digital content: 

• Digital Rights Management (DRM): Technology that restricts how digital content is accessed, copied, or shared, ensuring only authorised users can view or distribute your work.
  
  
• Content ID Systems: Platforms like YouTube use automated systems to identify copyrighted content and manage its use, including monetisation or takedown.
  
  
• Watermarking and Metadata Tagging: Embedding invisible or visible markers in your videos or music that trace the content back to you, deterring theft and helping prove ownership.
  

• DMCA Takedown Notices: Legal requests to platforms to remove unauthorised copies of your content.

Frequently Asked Questions (FAQs)

Importance of a Director Identification Number (DIN)

The Director Identification Number (DIN) is of significant importance in India's corporate governance framework. Here are some key reasons why DIN is crucial:

•  Unique Identification

• DIN provides a unique identification number to each director, ensuring there is clarity among individuals holding directorial positions in various companies.

•  Transparency and Accountability

• DIN enhances transparency by making director-related information publicly available.
  Stakeholders, including shareholders, regulators, and investors, can access the DIN database to verify the credentials and track the activities of directors across different companies.

•  Regulatory Compliance

• Obtaining a DIN is a mandatory requirement for individuals aspiring to become directors of Indian companies. The DIN system in India was implemented through Sections 266A to 266G of the Companies (Amendment) Act, 2006.

•  Ease of Business Operations

• DIN streamlines administrative processes related to director appointments and changes.
  By having a standardized identification system for directors, companies can efficiently manage their board compositions, update regulatory filings, and ensure compliance with legal requirements.

•  Investor Confidence

• The existence of a robust director identification system like DIN instills confidence among investors, both domestic and international.

Format of a Director Identification Number

The DIN is an 8-digit identifier issued by the Ministry of Corporate Affairs (MCA), the regulatory authority overseeing corporate affairs in India.

Each DIN is unique to the individual director and remains valid for their lifetime unless surrendered or revoked by the MCA due to non-compliance or other regulatory reasons.

Example of a DIN: 002345678

Documents required for obtaining a Director Identification Number

For SPICe+:

• Proof of Identity
• Proof of Address
• NOC or Rental Agreement

For DIR 3:

• Proof of Identity
• Proof of Residence
• NOC or Rental Agreement
• Digital Signature Certificate (DSC)
  Note: The identity proof and Address proof must be attested by the Company Secretary, a CA or, any professional. ,

How to apply for a Director Identification Number?

Obtaining a Director Identification Number (DIN) is mandatory before being appointed as a director of an existing company in India.

While the DIN for directors of a new company is allotted during the company's incorporation through an integrated SPICe+ Form, if you’re seeking directorship in existing companies or LLPs, you must apply for a DIN separately. The application process, known as DIR-3, can be completed online through the official website of the Indian Ministry of Corporate Affairs (MCA).

Application for DIN Through SPICE+

If you don’t have a Director Identification Number (DIN) and intend to serve as the first director in a new company, you must submit an application using the eForm SPICe+.

• Obtain the Digital Signature Certificates (DSCs) for the proposed Directors,
• Log in to the MCA portal with valid credentials.
• Navigate to the 'SPICe+' application from the application history on the user dashboard.
• Submit the SPICe+ Part A application.
• Click on the 'Proceed for incorporation' button.
• Access the SRN dashboard by clicking on the relevant SRN/SPICe+ application with the status as 'Draft.'
• Click on "Form No. SPICe + Part B”.
• Complete and Submit the SPICe+ Part B application along with the linked forms.
• Upload the DSC-affixed PDF document(s).
• Pay the fees.
• An intimation mail, along with the Certificate of Incorporation, PAN, TAN, etc., will be generated upon processing the web form.
• If the forms are uploaded successfully and the payment is made, the Approved DIN will be generated if there are no indications of potential duplication. However, if the details are flagged as potentially duplicate, a Provisional DIN will be generated instead.

Note: A provisional DIN will remain valid for a period of 60 days from the date on which it was generated.

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Application for DIN Through DIR 3

If you intend to become a Director in an existing company, you must submit an application using eForm DIR-3 and adhere to the process outlined below.

• Visit the official MCA website.
• Register as a new user if you haven't already done so, or log in using valid credentials.
• Select the "e-Forms" tab and click on the "e-Form upload" link to access the e-Form DIR-3.
• Complete the DIR-3 form with accurate details.
• Scan and upload the necessary supporting documents (attested) as per the requirements specified in the DIR-3 form.
• Form DIR-3 must be signed by you and digitally verified by a Company Secretary employed full-time by the company or by the Managing Director, Director, CEO, or CFO of the existing company where you intend to be appointed as a director.
• Pay the prescribed fee for processing.
• Once the verification process is completed and the application is found to be in order, you will be allotted a DIN.
• However, if the details are flagged as potentially duplicate, a Provisional DIN will be generated by the MCA.

As a director, you must notify all companies where you hold a directorship about the DIN within one month of receiving it from the central government. Subsequently, the company must inform the Registrar of Companies (RoC) within 15 days from the date when the director notifies them of their DIN. Failure to do so can incur penalties.

Common Causes of Rejection of a DIN

Here are some common mistakes that lead to the rejection of the DIN application:

• Failure to submit supporting documents
• Submission of invalid application or supporting documents
• Lack of attestation on documents
• Absence of a valid Digital Signature Certificate (DSC) for DIR3 applications

Validity of the Director Identification Number

In India, the Director Identification Number (DIN) remains valid for the lifetime of the individual director unless surrendered or revoked by the Ministry of Corporate Affairs (MCA) due to non-compliance, disqualification, or other regulatory reasons.

Fees for the Director Identification Number in India

If you are applying for a DIN through SPICe+, there are no additional charges as it is included in the fees of the SPICe+ application.

However, if you are applying through DIR-3, a fee of Rs 500 will be associated with it.

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Difference between Private Limited, LLPs & OPCs

Now that we've introduced the differences between these three types, let's explore their features and registration processes more thoroughly. This will help you determine which one is the most suitable for your business needs.

Private Limited Company: Features

In India, the Private Limited Company stands as the predominant choice for company registration, governed by the Companies Act of 2013 under the jurisdiction of the Ministry of Corporate Affairs (MCA). This structure is favoured by startups and businesses aspiring for growth and stability, owing to its adaptable ownership model and efficient management practices.

Outlined below are some key characteristics of a Private Limited Company:

1. Limited Liability

• Shareholders enjoy limited liability, safeguarding personal assets from business debts.

2. Separate Legal Entity

• Regarded as a distinct legal entity from its shareholders, allowing it to engage in contracts, own assets, and litigate under its name.

3. Ownership

• Owned by shareholders who possess shares in the company, with ownership transfer facilitated through share transactions.

4. Management

• Managed by appointed Directors, while day-to-day operations are overseen by management, with significant decisions often requiring shareholder approval.

5. Shareholders

• Requires a minimum of two shareholders and can accommodate a maximum of 200.

6. Regulation and Compliance

• Governed by the Companies Act and regulated by the Ministry of Corporate Affairs, mandating compliance with annual financial filings, general meetings, and statutory record maintenance.

7. Investment and Funding

• Attracts investment and funding relatively easily due to its defined ownership structure and limited liability feature.

Private Limited Company: Registration in India

The Ministry of Corporate Affairs (MCA) has introduced a streamlined and online process for company incorporation known as Simplified Proforma for Incorporating Company Electronically Plus (SPICe+), comprising two parts: Part A and Part B.

The steps are as follows:

1. Step 1: Apply for DSC

• Obtain a Digital Signature Certificate (DSC) from Certifying Agencies (CAs) with either one or two-year validity.

2. Step 2: Apply for Name Approval

• Apply for name using SPICe+ Part A which facilitates 'Name Reservation' with the provision for two proposed names and one re-submission (RSUB).

Note: While simultaneous application for name approval (Part A) and Incorporation (Part B) through SPICe+ is feasible, only one name can be reserved.

3. Step 3: Apply for Company Registration & Other Applications

• Following name approval, apply for Company Registration using SPICe+ Part B, which also includes the application for allotment of Director Identification Number (DIN), Permanent Account Number (PAN), Tax Deduction and Collection Account Number (TAN), etc.

4. Step 4: Apply for a Bank Account

• Open a current account for your company to facilitate seamless financial transactions and business operations.

5. Step 5: File the Commencement of Business Certificate

• Within 180 days of incorporation, file the Commencement of Business Certificate through Form INC-20A, which is a declaration submitted by the Director of the Company to the Registrar of Companies.

Upon approval of the SPICe+ Form, the Registrar of Companies (ROC) issues the Certificate of Incorporation, confirming the successful registration of your company.

The Certificate of Incorporation includes vital information such as the Company's name, registration number (CIN), date of incorporation, registered office address, and so on.

Example of CIN: U72200KA2013PTC097389

Read more about what each letter in a CIN signifies here.

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Limited Liability Partnerships: Features

A Limited Liability Partnership (LLP) is a business structure that combines features from both traditional partnerships and limited companies. And, LLPs are often favoured by professional services firms, small businesses, and ventures seeking the blend of partnership flexibility and limited liability protection.

Key characteristics of an LLP include:

1. Limited Liability

• Partners in an LLP benefit from limited liability akin to private limited companies.

2. Separate Legal Entity

• An LLP exists as a distinct legal entity from its partners, capable of owning assets, entering contracts, and engaging in legal proceedings independently.

3. Ownership

• Partners own the LLP, with the ownership structure outlined in the LLP agreement. Ownership transfer typically requires consent from other partners.

4. Management

• Managed by partners or a designated management team as specified in the LLP agreement. Decision-making is often collaborative, with each partner having an equal say.

5. Number of Partners

• Requires a minimum of two partners, with no maximum limit.

6. Regulation and Compliance

• Governed by the Limited Liability Partnership Act in India, featuring less stringent regulatory requirements compared to private limited companies. Compliance entails filing annual returns and maintaining statutory records.

7. Flexibility

• Offers enhanced flexibility in internal management and decision-making processes compared to private limited companies.

Limited Liability Partnerships: Registration in India

Establishing a Limited Liability Partnership (LLP) as a legally recognized business structure involves several crucial steps. Here is a brief and comprehensive outline of the LLP registration process.

1. Step 1: Obtain a DSC

• Obtain a Digital Signature Certificate (DSC) from Certifying agencies. To know more about the process, click here.

2. Step 2: Apply for Name Reservation

• Reserve an LLP's name via the LLP-RUN form, overseen by the Central Registration Centre. Up to two names can be proposed.

3. Submit the FiLLiP Form

• Fill out the FiLLiP form and submit it to the Registrar along with the Subscriber sheet and Director's consent (Form DIR-9).

4. Draft & File the LLP Agreement

• File the LLP Agreement using Form 3 on the MCA portal within 30 days of registration.

Upon approval of the FiLLiP Form by the Registrar of Companies (ROC), you will receive the Certificate of Incorporation, which has important details such as the LLP's name, registration number (LLPIN), date of incorporation, registered office address, and so on.

Example of LLPIN: AAA-1234

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One Person Companies: Features

One Person Companies (OPCs) present a unique business structure where a single individual can establish and manage a company. Combining aspects of a Private Limited Company and the advantages of Sole Proprietorship, OPCs cater to entrepreneurs and business owners who handle all ownership, operation, and management duties themselves.

1. Sole Ownership

• An OPC is solely owned and managed by a single individual, referred to as the sole shareholder or member.

2. Limited Liability

• Like other corporate structures, OPCs offer limited liability protection to the sole owner.

3. Separate Legal Entity

• OPCs are recognized as separate legal entities independent of the sole owner. This legal distinction enables you to enter contracts, own assets, and participate in legal proceedings under your company’s name.

4. Perpetual Succession

• Despite having only one member, OPCs feature perpetual succession. A nominee appointed during incorporation typically assumes control in the absence of the sole member.

By combining limited liability, separate legal entity status, and simplified operations, OPCs emerge as an appealing choice for small businesses and startups led by single entrepreneurs.

One Person Company: Registration in India

Due to their similarities with private limited companies, OPCs also employ SPICe+ for their company registration process.

SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) is a comprehensive online form introduced by the Ministry of Corporate Affairs (MCA) in India to streamline and simplify the company registration process.

1. Step 1: Apply for DSC

• Obtain a Digital Signature Certificate (DSC) from any Certifying Agencies in India.

2. Step 2: Submit Part A of SPICe+ Form (If filled separately)

• Apply for name approval using Part A of the SPICe+ form, allowing for submission of up to two proposed names and one re-submission.

3. Step 3: Draft the MoA & AoA

• Draft the Memorandum of Association (MoA) and Articles of Association (AoA) detailing the company's objectives and rules.

4. Step 4: Submit Part B of SPICe+ Form

• Submit Part B of the SPICe+ form along with necessary documents, including DSC, MoA, AoA, and declarations. Pay the prescribed fee for registration.

5. Step 5: Appoint a Nominee

• Appoint a nominee director as required by OPC regulations.

6. Step 6: File for the Commencement of Business Certificate

• Within 180 days of incorporation, file for the Commencement of Business Certificate (Form INC-20A) with the Registrar of Companies.

Upon successful approval of the SPICe+ Form, you’ll receive an email notification from the MCA containing the Certificate of Incorporation (COI) and PAN and TAN details of the Company.

The certificate of Incorporation (COI) includes crucial details such as the Company Name, Registration Number (CIN), Date of Incorporation, Registered Office Address, Company Structure, and more.

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For added clarity, check out our curated collection of sample templates, where you can download and customize most of these above-mentioned templates, as required.

Company Registration with Razorpay Rize

Razorpay Rize provides a wide array of services to facilitate an end-to-end streamlined company registration process, all at the lowest fees and without any hidden charges. Explore the different legal structures below to find the one that’s best for your business.

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Our package includes:

• Company Name Registration
• 2 Digital Signature Certificates (DSCs)
• 2 Directors’ Identification Numbers (DINs)
• Certificate of Incorporation(COI)
• MoA & AoA [Applicable for Private Limited Companies and OPCs]
• LLP Agreement [Applicable for LLPs]
• Company PAN & TAN

*Prices and documents can differ based on the company type.

Find Out Which Company Type to Register

If you operate a small business with limited resources, opting for LLP or OPC registration might be more favourable due to lighter compliance requirements. However, for larger businesses with substantial capital needs, registering as a Private Limited Company provides greater flexibility in raising funds. So, before proceeding with the registration of either a Private Limited Company, LLP, or OPC, it is essential to carefully evaluate the following factors.

• Business Nature and Size
• Fundraising Requirements
• Tax Implications
• Personal Liability Protection

Ultimately, the choice between a Private Limited Company, LLP, or OPC structure depends on the unique characteristics of your business, including its nature, size, fundraising requirements, tax implications, and personal liability protection.

Still confused about which company type to register with? We’ve got you covered! Introducing our latest tool - "Know Your Company Type."

For the first time in India, answer a quick set of questions about your startup, and this tool will utilize your responses to identify the perfect company registration type for you. Find your ideal fit with just one click!

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In summary, choosing between Private Limited Companies, OPCs, and LLPs depends on your business goals and preferences. Each structure offers unique benefits, whether it's scalability with Private Limited Companies, convenience with OPCs, or simplicity with LLPs. If you have any unanswered questions or want to get started with the company registration process, feel free to get in touch with us!

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